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Rossi tested the Ferrari Formula 1 car in 2006 on January 31, February 1, and February 2 at Valencia. The first test saw Rossi spin out on the damp track into the gravel trap, ending his day. On the second day, he posted the ninth fastest time Rossiof fifteen drivers, approximately one second behind Michael Schumacher, who himself was third fastest. Rossi lapped faster than seasoned drivers Red Bull Racing's Mark Webber and David Coulthard and Toyota F1's Jarno Trulli.  On the final day of testing, Rossi was just a little more than a half second behind Schumacher's best time. Schumacher hailed Rossi as having immense talent and said he would be perfectly capable of moving to Formula One and being competitive immediately.
On May 24, 2006, Rossi announced that he would be staying in MotoGP until he felt his work on the motorbike was "finished." Ferrari driver Schumacher said that he felt "saddened" by Rossi's decision but supported it. Rossi subsequently signed a new contract with Yamaha for the 2007 and 2008 seasons, then for 2009 and 2010.
Beyond his interest in F1, Rossi's strong passion is for rallying. In Rossi's youth one of his heroes was WRC Champion Colin McRae. Rally legend McRae taught Rossi the basics of driving a rally car. The two competed against each other at Monza in 2005, with McRae driving a Skoda Fabia WRC and Rossi winning in a Subaru Impreza WRC.  His first official foray into rallying came in 2002 at WRC Rally Great Britain, in which he crashed out on the second stage (first non-superspecial stage).
On October 11, 2006 it was announced that Rossi would enter that year's Rally New Zealand, a WRC event which was to run from November 17–19.  He competed in a Subaru WRC car finishing 11th out of 39. On November 26, 2006 Rossi also won the annual Monza Rally driving a Ford Focus W
WRC CarRC car. He beat the 2005 rally victor Rinaldo Capello by 24 seconds, winning five of the seven stages on his way. He also managed to outpace former WRC Champion Didier Auriol by seven seconds in the head-to-head Master Show final. Rossi also announced at the 2006 Monza rally, that he would be entering the 2007 Rally of Great Britain, however, he later opted out. At the 2007 Monza Rally, Rossi again took first place.
Rossi had been linked with a move to both Formula One and the World Rally Championship in 2007, having tested for Ferrari and competed in a number of rally events.
But Rossi decided to remain in Moto-GP; "I have a contract with Yamaha until 2008," said Rossi. "When that finishes then we will see. What I am sure about is that I will ride until I'm 31 or 32 at most. I will look for new stimuli in the next few seasons, but for now I am fully motivated". Rossi signed a new two year contract confirming he will be at Yamaha until 2010. He originally planned to use the Impreza WRC2008 during his participation in the Rally GB in December 2008,  but decided to drive a Ford Focus WRC instead. He finished the rally in 12th place, 13 minutes and 20.4 seconds behind eventual winner Sebastian Loeb.
In January 2010, Rossi said that when he retired from motorcycle racing, he hoped to move into rallying. "There are not many changes in a man's body between 22 and 34 so I still have some time left. I would consider shifting to cars, probably rallying, after that before I finally decide to take it easy … I know F1 would've been easier but by the time I finish MotoGP, I will be too old for F1." Stefano Domenicali, Ferrari's Formula One Team principal, however, reasserted his wish to have a third Ferrari on the F1 grid driven by Rossi, whilst confirming that Rossi would test an older Ferrari F1 car on 21 and 22 January 2010.
In March 2010, the Italian minister Franco Frattini government awarded Rossi the first Winning Italy Award for the image he portrays of his country on an international level.